Kellogg to drop 'All Natural' from some Kashi product labels

LOS ANGELES (Reuters) - Kellogg Co has agreed to stop using
terms such as "All Natural" and "100% Natural" on some of its
Kashi and Bear Naked brand product labels and to pay more than
$5 million to settle a class-action consumer fraud lawsuit.

The settlement by the world's No. 1 maker of breakfast
cereal marks the latest such outcome in a recent wave of
litigation challenging nutrition claims in food labeling.

Several lawsuits merged into a single case in 2011 accused
Kellogg of deceiving consumers by labeling products as "All
Natural" when they contained ingredients such as pyridoxine
hydrochloride, calcium pantothenate or hexane-processed soy oil.

The settlement must be approved by a federal judge in San
Diego overseeing the case before the suit is dismissed. It was
submitted in court last week and contained no admission of false
or misleading labeling by Kellogg.

In a statement on Thursday, company spokeswoman Kris Charles
said Kellogg's Kashi and Bear Naked lines "provide comprehensive
information about our foods to enable people to make
well-informed choices."

"We stand behind our advertising and labeling practices,"
she said. "We will comply with the terms of the settlement
agreement by the end of the year and will continue to ensure our
foods meet our high quality and nutrition standards, while
delivering the great taste people expect."

Under the proposed settlement, Kellogg will drop the terms
"All Natural" and "Nothing Artificial" from labeling and
advertising for Kashi products containing certain ingredients
challenged in the litigation.

Similarly, the terms "100% Natural" and "100% Pure and
Natural" will be removed from certain Bear Naked products.

Kellogg also agreed to establish a $5 million settlement
fund to allow consumers to recoup $0.50 per package for Kashi
products purchased during specified periods. A settlement fund
of $325,000 will be set up for Bear Naked consumer claims.

Lawyer Livia Kiser with the firm Loeb & Loeb, who
specializes in food labeling litigation, said lawsuits like the
Kashi and Bear Naked complaints were becoming more prevalent as
health-conscious consumers demand greater accuracy in packaging
and advertising.

"Kellogg's resolution of this case is part of a trend," she
said, adding that a number of companies have altered wording on
their products in the face of similar litigation.